Is Your “Actively Managed Fund” Really Actively Managed?

There are more than 40 mutual funds and exchange-traded funds (ETFs) widely available to investors that explicitly list the S&P 500 in their name. These funds track the large-cap index or follow a strategy based on a variant weighting or a subset of the index. A challenge for investors seeking passive exposure to the large-cap index is choosing which fund to invest in. The decision depends on both the characteristics being sought and the willingness to look closely at the strategy a fund is designed to follow. Here is a discussion of some of the basic differences between the various S&P 500 funds.

About 70% of active equity mutual funds are closet indexers that generally fail to beat the market after fees. Mutual funds with market-beating performance tend to be highly active, hold relatively fewer stocks and are of smaller size. This article highlights how to weed out closet indexers and identify truly active funds.

After 14 years, which is a fair period of evaluation and even included one of the three major crashes of the last hundred years, it seems the Model Fund Portfolio has not been able to beat the S&P 500 index.

Vote to answer this week’s Special Question: If the tax reforms being considered by Congress did away with deductions for mortgage interest and/or property taxes, how would that change how you invest in real estate?

Last Week’s Results:

If Congressional Republicans are not able to reach a consensus on tax reform, how much of an impact will this have on the U.S. stock market over the next six to 12 months?

Our readers weigh in on the impact failed tax reform could have on U.S. stocks. In addition, our latest special question asked what steps our readers are taking to make sure descendants or trustees can manage their digital accounts after they are gone.

Investors added $249.4 billion to exchange-traded funds (ETFs) during the first half of 2017, not far from the $287.5 billion added during full-year 2016. As of the end of June, total assets under management (AUM) for U.S.-listed ETFs was only slightly under $3 trillion, up 30% from 12 months ago. The latest update to AAII’s annual ETF guide includes detailed return information and data on more than 2,000 exchange-traded products.

The AAII Weekly Digest is one of the many benefits of AAII membership. To learn more, consider a 30-day Trial AAII Membership to start becoming an effective anager of your own assets.